EN BANC

[G.R. No. L-24421. April 30, 1970.]

MATIAS GONGON, Petitioner, v. COURT OF

APPEALS, THE SPOUSES AMADA AQUINO and
RUFINO RIVERA, THE OFFICE OF THE LAND
TENURE ADMINISTRATION, and THE OFFICE
OF THE EXECUTIVE SECRETARY OF THE
PRESIDENT OF THE
PHILIPPINES, Respondents.

Enrique M. Fernando for Petitioner.

Bengzon & Bengzon for respondents spouses

Amada Aquino, Et. Al.

Solicitor General for other respondents.

SYLLABUS

1. LAND REFORM; LANDED ESTATES; POLICY

GOVERNING DISPOSITION OF LANDED ESTATES;
CASE AT BAR.— The intendment of Commonwealth
Act No. 539, governing the acquisition and
disposition of landed estates is to award lots to
those who may apply, the first choice to the bona
fide "tenants," the second to the "occupants," and
the last, to "private individuals," if the parties
affected thereby stand on equal footing or under
equal circumstances. Where the parties cannot be
said to be in equal footing — respondent spouses
have their house on another lot they already own
which is bigger than that where petitioner
constructed his house — justice and equity
command that petitioner be given the preferential
right to purchase the lot in question to carry out
the avowed policy of the law to give land to the
landless.
2. ID.; ID.; WAIVER OF PREFERENTIAL RIGHT,
CONTRARY TO PUBLIC POLICY.— Petitioner’s
waiver of his preferential right over the lot being
contrary to the avowed policy laid down in
Commonwealth Act No. 539, such waiver is null
and void.

DECISION

MAKALINTAL, J.:

This is a petition for review of the decision of the

Court of Appeals which affirmed the dismissal by
the Court of First Instance of Manila of Matias
Gongon’s complaint to set aside the decision of the
Land Tenure Administration — as affirmed by the
Office of the President — awarding Lot 18-B, Block
23 of the Tambobong Estate, to herein private
respondent Amada Aquino, wife of her co-
respondent Rufino Rivera. The decision appealed
from likewise ordered Gongon to turn over the
possession of the litigated lot to Amada Aquino, to
pay the rentals due at the rate of P6.00 a month
from 1949 until such possession is restored to her
and to pay attorney’s fees in the amount of
P1,000.00.

Lot 18-B, Block 23, with an area of 274 square

meters, is a portion of the Tambobong Estate in
Malabon, Rizal, which used to belong in its entirety
to the Roman Catholic Church. The lot was
originally leased to Amada Aquino. who in turn
sublet it in 1934 to Matias Gongon for a term of 15
years at a nominal monthly rental of P6.00. The
sublessee constructed his residential house on the
property and since then has been living there,
together with his family.

Meanwhile, the Tambobong Estate was purchased

by the Government from the Roman Catholic
Church on December 31, 1947 under the
provisions of Section 1 of Commonwealth Act No.
539, which authorized the President of the
Philippines." . . to acquire private lands or any
interest, through purchase or expropriation, and to
subdivide the same into home lots or small farms
for resale at reasonable prices and under such
conditions as he may fix to their bona fide tenants
or occupants or to private individuals who will work
the lands themselves and who are qualified to
acquire and own lands in the Philippines." In due
time Matias Gongon filed an application with the
defunct Rural Progress Administration for the
purchase of Lot 18-B, Block 23, claiming
preferential right as bona fide occupant. The
application was opposed by Amada Aquino, who
also filed her own application, alleging that as bona
fide tenant or lessee she had the preferential right
to purchase the lot. After investigation, the
Director of Lands — the Bureau of Lands having
then taken over the functions of the Rural Progress
Administration — rendered a decision on May 31,
1965 approving Gongon’s application, he being the
actual occupant. On appeal to the Secretary of
Agriculture and Natural Resources, this official set
aside the order of the Director of Lands and gave
due course to Amada Aquino’s application.

Matias Gongon moved for reconsideration, but his

motion was denied by the Land Tenure
Administration, which had meanwhile taken over
the functions, powers and duties of the Landed
Estate Division of the Bureau of Lands upon the
enactment of Republic Act No. 1400. Matias
Gongon then appealed to the Office of the
President, which thereafter affirmed the decision of
the Land Tenure Administration. Accordingly, on
February 24, 1961 the Land Tenure Administration
executed a deed of sale of Lot 18-B in favor of
Amada Aquino, as a result of which she obtained,
on March 10, 19761, Transfer Certificate of Title
No. 84738 in her name.

On April 24, 1961 Matias Gongon filed the instant

case in the Court of First Instance of Manila to
annul the decisions of the Land Tenure
Administration and of not in question to him; to
cancel its registration in the name of Amada
Aquino and to have it registered in his name
instead. The complaint likewise contained a prayer
for attorney’s fees and costs.

It is noteworthy that the Land Tenure

Administration, in a manifestation it filed in the
lower court on May 27, 1961, made common cause
with herein appellant Matias Gongon, stating (in
part) as follows:jgc:chanrobles.com.ph

"That at the time it issued the said Order, the LTA

Board of Administrators was newly constituted and
therefore it has not had sufficient time to study
thoroughly the legality or wisdom of the Bureau of
Lands policy giving preference right to tenants to
purchase the lots leased by them over and above
the actual occupants or sublessees thereof; hence,
it just affirmed the said decision of the Department
of Agriculture and Natural Resources as a matter of
sound administrative policy.

That after a serious study of the issues of facts and

of law in cases identical to the case at bar, the LTA
Board of Administrators found out that it would be
more in keeping with the spirit and intention of the
laws (Commonwealth Acts Nos. 20 and 539 and
Republic Act No 1400) governing acquisition and
disposition of the landed estates (including the
Tambobong Estate) if it followed the doctrine laid
down by the Supreme Court in the case of
Marukot, Et. Al. v. Jacinto, Et Al., (GR. Nos. L-
8036-38) promulgated on December 20, 1955,
giving the actual occupants or sublessees the
preference to purchase the lots occupied by them
as against tenants or lessees who do not occupy
the same; hence answering defendant
subsequently reversed the policy followed by the
Bureau of Lands and adopted by the doctrines laid
down in the Marukot case."cralaw virtua1aw library

As heretofore stated, the lower court dismissed the

complaint. In due time the plaintiff elevated the
case to the Court of Appeals. In affirming the
decision appealed from the appellate court pointed
out (1) that the finding of the Secretary of
Agriculture and Natural Resources, as affirmed by
the Office of the President, to the effect that
appellant Matias Gongon had waived whatever
right he might have had over the lot in question
was factual in nature and could not be reviewed by
the courts; and (2) that appellant could be not
considered as a bona fide occupant of the lot
because his possession as sublessee was in effect
possession by the lessee, citing Article 524 of the
Civil Code.

His motion for reconsideration having been denied

by the Court of Appeals, Matias Gongon filed the
present petition for review, contending that the
appellate court erred in failing to recognize his
right as sublessee-tenant to the lot in question and
in not cancelling the sale thereof to respondent
Amada Aquino as well as its registration in her
name; in holding that he had waived his right to
the lot in question in favor of respondents-spouses
Amada Aquino and Rufino Rivera; and in ordering
him to pay rentals at the rate of P6.00 a month
from 1949, plus attorney’s fees and costs.

The two issues posed in this appeal are (1)

whether or not petitioner has the preferential right
to purchase the lot in question; and (2) if he has,
whether or not the alleged waiver of whatever right
he might have had over said lot is valid.

The first issue involves a conflict of claims between

a lessee and a sublesee insofar as the right to
purchase the property is concerned. Several
decisions of this Court have been cited and
discussed by the parties. Parenthetically, it may be
noted that in those cases the concept of possession
by a sublessee under the Civil Code, which
according to the Court of Appeals in its decision
under review was in effect possession by the lessee
sublessor, was not considered by this Court
applicable at all in construing the term "occupant"
under Commonwealth Act No. 539.

In Grande v. Santos (98 Phil. 62), the registered

lessee sublet two portions of the lot to two
different persons. In giving the right of preference
to the registered lessee this Court took into
consideration a number of circumstances: that the
lot was a small one of only 144 square meters;
that the lessee was himself an actual occupant of
part thereof; and that to subdivide said lot into
three portions would, owing to the extremely
limited size of each, lead to frictions, conflicts,
misunderstandings and perhaps disturbances of the
peace — consequences which Commonwealth Act
No. 539 precisely sought to avert.
On the other hand, Marukot, Et. Al. v. Jacinto and
Director of Lands (supra, 98 Phil. 128) this Court
awarded to the sublessees the portions of the lot
they were occupying, as against the claim of the
lessee. This case differed from the Grande case not
only in that the lot involved had a bigger area —
some 500 square meters — but principally in the
fact that the lessee was not actually occupying the
lot but had his residence on another property
altogether. This Court did not rule on whether a
"tenant" that is, a lessee, should enjoy priority
over an "occupant" who is a sublessee, because
after awarding the portions covered by the
sublease to the actual occupants, the registered
lessee still got about 300 square meters, or 100
square meters more than the total area awarded to
the sublessees.

In Santiago, Et. Al. v. Cruz, Et Al., (98 Phil. 168),

the right of preference was given to the registered
tenant. In interpreting Section 1 of Commonwealth
Act No. 539, this Court said that "the intendment
of the law is to award the lots to those who may
apply in the order mentioned", that is, "the first
choice is given to the bona fide ‘tenants’, the
second to the ‘occupants’ and the last to ‘private
individuals.’" The Court also took into consideration
the fact that the sublessees executed a document
expressly agreeing to vacate the lots anytime the
tenant so required, together with the affidavit of
one of the sublessees acknowledging the right of
the tenant to purchase the lot and renouncing
whatever rights he might have to purchase it.

However, in the subsequent case of Gutierrez v.

Santos, Et. Al. (107 Phil. 419), the ruling in the
Santiago decision was clarified and given a
restrictive application, as
follows:jgc:chanrobles.com.ph

"Now, we say that the above order of preference

should be observed if the parties affected stand on
an equal footing or under equal circumstances, for
only in that way can the provision of the law be
implemented with equity, justice and fairness to all
and in keeping with the spirit of giving land to the
landless so that he may have a land of his own.
But the order need not be rigidly followed when a
party, say a bona fide tenant, has already in his
name other lots more than what he needs for his
family, for certainly to give him the preference
would work injustice to the occupants."cralaw
virtua1aw library

In the case at bar it is not disputed that

respondent spouses have their house on another
lot (lot No. 34, block No. 7) in the Tambobong
Estate. Furthermore, respondent Rufino Rivera is
the registered bona fide tenant of still another lot,
also in Tambobong, with an area of 2,761 square
meters, which is considerably bigger than the lot in
question, where petitioner and his family
constructed their residence and where they have
been living since 1934. It cannot be said,
therefore, that the parties herein stand on an equal
footing or under equal circumstances. Justice and
equity command that petitioner be given the
preferential right to purchase in order to carry out
the avowed policy of the law to give land to the
landless.

On the second issue petitioner’s position is that his

preferential right could not be validly waived, such
waiver being against public policy. Under Article 6
of the new Civil Code "rights may be waived,
unless the waiver is contrary to law, public order,
public policy, morals, or good customs, or
prejudicial to a third person with a right recognized
by law." The old Civil Code (Art. 4) carried a similar
provision, although it mentioned only public
interest or public order.

That Commonwealth Act No. 539 lays down a

public policy there can be no doubt. In the case of
Juat v. Land Tenure Administration, G.R. No. L-
17080, January 28, 1961, this Court, thru Mr.
Justice Felix Angelo Bautista. ruled in this
wise:chanrob1es virtual 1aw library

. . . It may also be stated that the avowed policy

behind the adoption of such measure, is, as aptly
observed by the Court of Appeals, ‘to provide the
landless elements of our population with lots upon
which to build their homes and small farms which
they can cultivate and from which they can derive
their livelihood without being beholden to any man’
(Pascual v. Lucas, 51 O.G., No. 4, p. 2429), such
measure having been adopted in line with the
policy of social justice enshrined in our Constitution
to remedy and cure the social unrest caused by the
concentration of landed estates in the hands of a
few by giving to the landless elements a piece of
land they can call their own."cralaw virtua1aw
library

Being contrary to public policy, the alleged waiver

of his right made by herein petitioner should be
considered null and void.

WHEREFORE, the decision appealed from is

reversed. The award of the lot in question to
respondent Amada Aquino is set aside; transfer
certificate of title No. 84738 of the Registry of
Deeds of Rizal is ordered cancelled; and petitioner
is declared to have the preferential right to
purchase the said lot. Costs against respondents.

Concepcion, C.J., Reyes, J.B.L., Dizon and Zaldivar,

Teehankee, JJ., concur.

Castro, Fernando, Barredo and Villamor, JJ., took

no part.